Latin America offers an underserved and underbanked market ripe for innovative financial solutions. The need for KYC is enormous and will only grow as the region continues to benefit from the expanding use of digital payments.
Fintech growth and opportunities in Latin America
Latin America is recently one of fintech’s hottest markets, providing a fertile ground for financial service adoption – potentiated by the high mobile app usage, subpar financial services, and the vast unbanked population. In 2021, the fintech venture and startup landscape reached $6B in investments in 2021, 3x more since 2020 and 24x more since 2016.
Furthermore, governments have implemented fintech-friendly regulations:
- Mexico launched a framework called “Ley Fintech” in 2018.
- Brazil approved the Open Banking initiative in 2019.
- Peru approved the Regulation of Innovative Models in 2021.
Given the favorable context, Latin America attracts foreign investors in fintech: fintech investments make up 37% of the total VC funding in Latin America, compared to 17% for the US and 26% for Europe.
A study by the Inter-American Development Bank (IDB), IDB Invest, and Finnovista showcase the fintech ecosystem in Latin America has doubled in size in the past three years, representing 22.6% of the total number of fintech platforms worldwide.
In 2022, internet penetration in Latin America reached 75.6%, 10 points above the global average. In a region where internet use is widespread and access to banking is limited, there is an opportunity for new businesses to provide financial solutions to a large underbanked online population.
Expand into Latin America confidently.
Future-driven fintech businesses that enter the Latin American market can benefit from AcuityTec’s on-demand and comprehensive KYC digital identity data verification suite with automated fraud prevention. Regardless if you are entering the market, expanding your operations, or striving to work with an orchestration data hub provider to enhance agility and scalability.
AcuityTec’s ID verification coverage lets companies instantly check identity attributes such as name, address, liveness, and date of birth. Brazilian customers enjoy an enriched ID verification experience to support CPF ID verification coverage.
Along with the Latin American identity verifications, AcuityTec’s complete KYC data suite provides essential services such as device intelligence, AML sanction screening, database check, BIN, phone, geo verification, crypto address validation, customer authentication services and more.
Establish a customizable KYC verification workflow across your customer journey and leverage real-time cascading verification logic to ensure the best data output with cost savings.
Protect your customers and your business.
With the Latin American fintech market increasing, so are its fraudsters as they hone in on the region, causing many merchants to experience a surge in online payment fraud and account takeover.
Recent surveys show that almost 80% of Mexican merchants have experienced an increase in online payment fraud, with an overwhelming 70% increase in account takeovers. 20% of the new online accounts created in the region are suspicious.
Additionally, the MRC’s 2021 Global Fraud Report mentions that 3.5% of e-commerce transactions in Latin America were fraud attempts. The global average was 2.6%.
These statistics show that fintech businesses need efficient risk-prevention measures to protect themselves and their customers from fraudsters. Establishing accurate digital identity data verifications streamlines the customer journey, improves KYC, aids your AML (anti-money laundering) efforts, and simplifies compliance and risk mitigation management strategy.
With AcuityTec, fraud prevention is automated and streamlined with automated and fully dynamic risk mitigation tools comprised of granular risk score analysis, customer profiles, centralized risk queues for registrations and transactions, reporting & dashboard analytics, and more. The harmonized view of all your customers’ KYC verifications and engagement tracking allows you to provide a frictionless customer experience and effectively combat fraud. Use their data science intelligence to simulate risk data reports to ensure accurate risk prevention measures are active before entering Latin America or optimize your already functional fintech solution.
The bottom line
Financial companies in Latin America are experiencing a rising disparity between the growth of their fintech market and their ability to manage fraud risks effectively. This disparity is creating substantial risk for the financial health of businesses, as well as for customers. AcuityTec’s unified KYC data verification and fraud prevention platform allows you to select the services according to your need, combine them into a bespoke workflow, and operate an end-to-end process through cutting-edge automation via just one API. Scale and protect your business and customers against the increasingly sophisticated fraudsters today.